[G.R. No. 103577.
October 7, 1996] said property and Miss Ramona Patricia Alcaraz shall
ROMULO A. CORONEL, ALARICO A. CORONEL,
ANNETTE A. CORONEL, ANNABELLE C.
GONZALES (for herself and on behalf of Floraida C.
Tupper, as attorney-in-fact), CIELITO A. CORONEL,
FLORAIDA A. ALMONTE, and CATALINA BALAIS
MABANAG, petitioners, vs. THE COURT OF
APPEALS, CONCEPCION D. ALCARAZ and
RAMONA PATRICIA ALCARAZ, assisted by
GLORIA F. NOEL as attorney-in-fact, respondents.
DECISION
MELO, J.:
The petition before us has its roots in a complaint for
specific performance to compel herein petitioners
(except the last named, Catalina Balais Mabanag) to
consummate the sale of a parcel of land with its
improvements located along Roosevelt Avenue in
Quezon City entered into by the parties sometime in
January 1985 for the price of P1,240,000.00.
The undisputed facts of the case were summarized by
respondent court in this wise:
On January 19, 1985, defendants-appellants Romulo
Coronel, et. al. (hereinafter referred to as Coronels)
executed a document entitled Receipt of Down Payment
(Exh. A) in favor of plaintiff Ramona Patricia Alcaraz
(hereinafter referred to as Ramona) which is reproduced
hereunder:
RECEIPT OF DOWN PAYMENT
P1,240,000.00 - Total amount
50,000.00 - Down payment
------------------------------------------
P1,190,000.00 - Balance
Received from Miss Ramona Patricia Alcaraz of 146
Timog, Quezon City, the sum of Fifty Thousand Pesos
purchase price of our inherited house and lot, covered by
TCT No. 119627 of the Registry of Deeds of Quezon
City, in the total amount of P1,240,000.00.
We bind ourselves to effect the transfer in our names
from our deceased father, Constancio P. Coronel, the
transfer certificate of title immediately upon receipt of
the down payment above-stated.
On our presentation of the TCT already in or name, We
will immediately execute the deed of absolute sale of
immediately pay the balance of the P1,190,000.00.
Clearly, the conditions appurtenant to the sale are the
following:
1. Ramona will make a down payment of Fifty Thousand
(P50,000.00) pesos upon execution of the document
aforestated;
2. The Coronels will cause the transfer in their names of
the title of the property registered in the name of their
deceased father upon receipt of the Fifty Thousand
(P50,000.00) Pesos down payment;
3. Upon the transfer in their names of the subject
property, the Coronels will execute the deed of absolute
sale in favor of Ramona and the latter will pay the
former the whole balance of One Million One Hundred
Ninety Thousand (P1,190,000.00) Pesos.
On the same date (January 15, 1985), plaintiff-appellee
Concepcion D. Alcaraz (hereinafter referred to as
Concepcion), mother of Ramona, paid the down
payment of Fifty Thousand (P50,000.00) Pesos (Exh. B,
Exh. 2).
On February 6, 1985, the property originally registered
in the name of the Coronels father was transferred in
their names under TCT No. 327043 (Exh. D; Exh 4)
On February 18, 1985, the Coronels sold the property
covered by TCT No. 327043 to intervenor-appellant
Catalina B. Mabanag (hereinafter referred to as Catalina)
for One Million Five Hundred Eighty Thousand
(P1,580,000.00) Pesos after the latter has paid Three
Hundred Thousand (P300,000.00) Pesos (Exhs. F-3;
Exh. 6-C)
For this reason, Coronels canceled and rescinded the
contract (Exh. A) with Ramona by depositing the down
payment paid by Concepcion in the bank in trust for
Ramona Patricia Alcaraz.
On February 22, 1985, Concepcion, et. al., filed a
complaint for a specific performance against the
Coronels and caused the annotation of a notice of lis
pendens at the back of TCT No. 327403 (Exh. E; Exh.
5).
On April 2, 1985, Catalina caused the annotation of a
notice of adverse claim covering the same property with
the Registry of Deeds of Quezon City (Exh. F; Exh. 6).
1
On April 25, 1985, the Coronels executed a Deed of
Absolute Sale over the subject property in favor of
Catalina (Exh. G; Exh. 7).
On June 5, 1985, a new title over the subject property
was issued in the name of Catalina under TCT No.
351582 (Exh. H; Exh. 8).
(Rollo, pp. 134-136)
In the course of the proceedings before the trial court
(Branch 83, RTC, Quezon City) the parties agreed to
submit the case for decision solely on the basis of
documentary exhibits. Thus, plaintiffs therein (now
private respondents) proffered their documentary
evidence accordingly marked as Exhibits A through J,
inclusive of their corresponding submarkings. Adopting
these same exhibits as their own, then defendants (now
petitioners) accordingly offered and marked them as
Exhibits 1 through 10, likewise inclusive of their
corresponding submarkings. Upon motion of the parties,
the trial court gave them thirty (30) days within which to
simultaneously submit their respective memoranda, and
an additional 15 days within which to submit their
corresponding comment or reply thereto, after which, the
case would be deemed submitted for resolution.
On April 14, 1988, the case was submitted for resolution
before Judge Reynaldo Roura, who was then temporarily
detailed to preside over Branch 82 of the RTC of
Quezon City. On March 1, 1989, judgment was handed
down by Judge Roura from his regular bench at
Macabebe, Pampanga for the Quezon City branch,
disposing as follows:
WHEREFORE, judgment for specific performance is
hereby rendered ordering defendant to execute in favor
of plaintiffs a deed of absolute sale covering that parcel
of land embraced in and covered by Transfer Certificate
of Title No. 327403 (now TCT No. 331582) of the
Registry of Deeds for Quezon City, together with all the
improvements existing thereon free from all liens and
encumbrances, and once accomplished, to immediately
deliver the said document of sale to plaintiffs and upon
receipt thereof, the plaintiffs are ordered to pay
defendants the whole balance of the purchase price
amounting to P1,190,000.00 in cash. Transfer Certificate
of Title No. 331582 of the Registry of Deeds for Quezon
City in the name of intervenor is hereby canceled and
declared to be without force and effect. Defendants and
intervenor and all other persons claiming under them are
hereby ordered to vacate the subject property and deliver
possession thereof to plaintiffs. Plaintiffs claim for
damages and attorneys fees, as well as the counterclaims
of defendants and intervenors are hereby dismissed.
No pronouncement as to costs.
So Ordered.
Macabebe, Pampanga for Quezon City, March 1, 1989.
(Rollo, p. 106)
A motion for reconsideration was filed by petitioners
before the new presiding judge of the Quezon City RTC
but the same was denied by Judge Estrella T. Estrada,
thusly:
The prayer contained in the instant motion, i.e., to annul
the decision and to render anew decision by the
undersigned Presiding Judge should be denied for the
following reasons: (1) The instant case became
submitted for decision as of April 14, 1988 when the
parties terminated the presentation of their respective
documentary evidence and when the Presiding Judge at
that time was Judge Reynaldo Roura. The fact that they
were allowed to file memoranda at some future date did
not change the fact that the hearing of the case was
terminated before Judge Roura and therefore the same
should be submitted to him for decision; (2) When the
defendants and intervenor did not object to the authority
of Judge Reynaldo Roura to decide the case prior to the
rendition of the decision, when they met for the first
time before the undersigned Presiding Judge at the
hearing of a pending incident in Civil Case No. Q-46145
on November 11, 1988, they were deemed to have
acquiesced thereto and they are now estopped from
questioning said authority of Judge Roura after they
received the decision in question which happens to be
adverse to them; (3) While it is true that Judge Reynaldo
Roura was merely a Judge-on-detail at this Branch of the
Court, he was in all respects the Presiding Judge with
full authority to act on any pending incident submitted
before this Court during his incumbency. When he
returned to his Official Station at Macabebe, Pampanga,
he did not lose his authority to decide or resolve cases
submitted to him for decision or resolution because he
continued as Judge of the Regional Trial Court and is of
co-equal rank with the undersigned Presiding Judge. The
standing rule and supported by jurisprudence is that a
Judge to whom a case is submitted for decision has the
authority to decide the case notwithstanding his transfer
to another branch or region of the same court (Sec. 9,
Rule 135, Rule of Court).
Coming now to the twin prayer for reconsideration of
the Decision dated March 1, 1989 rendered in the instant
case, resolution of which now pertains to the
undersigned Presiding Judge, after a meticulous
examination of the documentary evidence presented by
the parties, she is convinced that the Decision of March
2
1, 1989 is supported by evidence and, therefore, should
not be disturbed.
IN VIEW OF THE FOREGOING, the Motion for
Reconsideration and/or to Annul Decision and Render
Anew Decision by the Incumbent Presiding Judge dated
March 20, 1989 is hereby DENIED.
SO ORDERED.
Quezon City, Philippines, July 12, 1989.
(Rollo, pp. 108-109)
Petitioners thereupon interposed an appeal, but on
December 16, 1991, the Court of Appeals (Buena,
Gonzaga-Reyes, Abad-Santos (P), JJ.) rendered its
decision fully agreeing with the trial court.
Hence, the instant petition which was filed on March 5,
1992. The last pleading, private respondents Reply
Memorandum, was filed on September 15, 1993. The
case was, however, re-raffled to undersigned ponente
only on August 28, 1996, due to the voluntary inhibition
of the Justice to whom the case was last assigned.
While we deem it necessary to introduce certain
refinements in the disquisition of respondent court in the
affirmance of the trial courts decision, we definitely find
the instant petition bereft of merit.
The heart of the controversy which is the ultimate key in
the resolution of the other issues in the case at bar is the
precise determination of the legal significance of the
document entitled Receipt of Down Payment which was
offered in evidence by both parties. There is no dispute
as to the fact that the said document embodied the
binding contract between Ramona Patricia Alcaraz on
the one hand, and the heirs of Constancio P. Coronel on
the other, pertaining to a particular house and lot covered
by TCT No. 119627, as defined in Article 1305 of the
Civil Code of the Philippines which reads as follows:
Art. 1305. A contract is a meeting of minds between two
persons whereby one binds himself, with respect to the
other, to give something or to render some service.
While, it is the position of private respondents that the
Receipt of Down Payment embodied a perfected contract
of sale, which perforce, they seek to enforce by means of
an action for specific performance, petitioners on their
part insist that what the document signified was a mere
executory contract to sell, subject to certain suspensive
conditions, and because of the absence of Ramona P.
Alcaraz, who left for the United States of America, said
contract could not possibly ripen into a contract of
absolute sale.
Plainly, such variance in the contending parties
contention is brought about by the way each interprets
the terms and/or conditions set forth in said private
instrument. Withal, based on whatever relevant and
admissible evidence may be available on record, this
Court, as were the courts below, is now called upon to
adjudge what the real intent of the parties was at the time
the said document was executed.
The Civil Code defines a contract of sale, thus:
Art. 1458. By the contract of sale one of the contracting
parties obligates himself to transfer the ownership of and
to deliver a determinate thing, and the other to pay
therefor a price certain in money or its equivalent.
Sale, by its very nature, is a consensual contract because
it is perfected by mere consent. The essential elements of
a contract of sale are the following:
a) Consent or meeting of the minds, that is, consent to
transfer ownership in exchange for the price;
b) Determinate subject matter; and
c) Price certain in money or its equivalent.
Under this definition, a Contract to Sell may not be
considered as a Contract of Sale because the first
essential element is lacking. In a contract to sell, the
prospective seller explicitly reserves the transfer of title
to the prospective buyer, meaning, the prospective seller
does not as yet agree or consent to transfer ownership of
the property subject of the contract to sell until the
happening of an event, which for present purposes we
shall take as the full payment of the purchase price.
What the seller agrees or obliges himself to do is to
fulfill his promise to sell the subject property when the
entire amount of the purchase price is delivered to him.
In other words the full payment of the purchase price
partakes of a suspensive condition, the non-fulfillment of
which prevents the obligation to sell from arising and
thus, ownership is retained by the prospective seller
without further remedies by the prospective buyer. In
Roque vs. Lapuz (96 SCRA 741 [1980]), this Court had
occasion to rule:
Hence, We hold that the contract between the petitioner
and the respondent was a contract to sell where the
ownership or title is retained by the seller and is not to
pass until the full payment of the price, such payment
being a positive suspensive condition and failure of
which is not a breach, casual or serious, but simply an
3
event that prevented the obligation of the vendor to
convey title from acquiring binding force.
Stated positively, upon the fulfillment of the suspensive
condition which is the full payment of the purchase
price, the prospective sellers obligation to sell the
subject property by entering into a contract of sale with
the prospective buyer becomes demandable as provided
in Article 1479 of the Civil Code which states:
Art. 1479. A promise to buy and sell a determinate thing
for a price certain is reciprocally demandable.
An accepted unilateral promise to buy or to sell a
determinate thing for a price certain is binding upon the
promissor of the promise is supported by a consideration
distinct from the price.
A contract to sell may thus be defined as a bilateral
contract whereby the prospective seller, while expressly
reserving the ownership of the subject property despite
delivery thereof to the prospective buyer, binds himself
to sell the said property exclusively to the prospective
buyer upon fulfillment of the condition agreed upon, that
is, full payment of the purchase price.
A contract to sell as defined hereinabove, may not even
be considered as a conditional contract of sale where the
seller may likewise reserve title to the property subject
of the sale until the fulfillment of a suspensive condition,
because in a conditional contract of sale, the first
element of consent is present, although it is conditioned
upon the happening of a contingent event which may or
may not occur. If the suspensive condition is not
fulfilled, the perfection of the contract of sale is
completely abated (cf. Homesite and Housing Corp. vs.
Court of Appeals, 133 SCRA 777 [1984]). However, if
the suspensive condition is fulfilled, the contract of sale
is thereby perfected, such that if there had already been
previous delivery of the property subject of the sale to
the buyer, ownership thereto automatically transfers to
the buyer by operation of law without any further act
having to be performed by the seller.
In a contract to sell, upon the fulfillment of the
suspensive condition which is the full payment of the
purchase price, ownership will not automatically transfer
to the buyer although the property may have been
previously delivered to him. The prospective seller still
has to convey title to the prospective buyer by entering
into a contract of absolute sale.
It is essential to distinguish between a contract to sell
and a conditional contract of sale specially in cases
where the subject property is sold by the owner not to
the party the seller contracted with, but to a third person,
as in the case at bench. In a contract to sell, there being
no previous sale of the property, a third person buying
such property despite the fulfillment of the suspensive
condition such as the full payment of the purchase price,
for instance, cannot be deemed a buyer in bad faith and
the prospective buyer cannot seek the relief of
reconveyance of the property. There is no double sale in
such case. Title to the property will transfer to the buyer
after registration because there is no defect in the owner-
sellers title per se, but the latter, of course, may be sued
for damages by the intending buyer.
In a conditional contract of sale, however, upon the
fulfillment of the suspensive condition, the sale becomes
absolute and this will definitely affect the sellers title
thereto. In fact, if there had been previous delivery of the
subject property, the sellers ownership or title to the
property is automatically transferred to the buyer such
that, the seller will no longer have any title to transfer to
any third person. Applying Article 1544 of the Civil
Code, such second buyer of the property who may have
had actual or constructive knowledge of such defect in
the sellers title, or at least was charged with the
obligation to discover such defect, cannot be a registrant
in good faith. Such second buyer cannot defeat the first
buyers title. In case a title is issued to the second buyer,
the first buyer may seek reconveyance of the property
subject of the sale.
With the above postulates as guidelines, we now proceed
to the task of deciphering the real nature of the contract
entered into by petitioners and private respondents.
It is a canon in the interpretation of contracts that the
words used therein should be given their natural and
ordinary meaning unless a technical meaning was
intended (Tan vs. Court of Appeals, 212 SCRA 586
[1992]). Thus, when petitioners declared in the said
Receipt of Down Payment that they --
Received from Miss Ramona Patricia Alcaraz of 146
Timog, Quezon City, the sum of Fifty Thousand Pesos
purchase price of our inherited house and lot, covered by
TCT No. 1199627 of the Registry of Deeds of Quezon
City, in the total amount of P1,240,000.00.
without any reservation of title until full payment of the
entire purchase price, the natural and ordinary idea
conveyed is that they sold their property.
When the Receipt of Down payment is considered in its
entirety, it becomes more manifest that there was a clear
intent on the part of petitioners to transfer title to the
buyer, but since the transfer certificate of title was still in
the name of petitioners father, they could not fully effect
such transfer although the buyer was then willing and
4
able to immediately pay the purchase price. Therefore,
petitioners-sellers undertook upon receipt of the down
payment from private respondent Ramona P. Alcaraz, to
cause the issuance of a new certificate of title in their
names from that of their father, after which, they
promised to present said title, now in their names, to the
latter and to execute the deed of absolute sale
whereupon, the latter shall, in turn, pay the entire
balance of the purchase price.
The agreement could not have been a contract to sell
because the sellers herein made no express reservation of
ownership or title to the subject parcel of land.
Furthermore, the circumstance which prevented the
parties from entering into an absolute contract of sale
pertained to the sellers themselves (the certificate of title
was not in their names) and not the full payment of the
purchase price. Under the established facts and
circumstances of the case, the Court may safely presume
that, had the certificate of title been in the names of
petitioners-sellers at that time, there would have been no
reason why an absolute contract of sale could not have
been executed and consummated right there and then.
Moreover, unlike in a contract to sell, petitioners in the
case at bar did not merely promise to sell the property to
private respondent upon the fulfillment of the suspensive
condition. On the contrary, having already agreed to sell
the subject property, they undertook to have the
certificate of title change to their names and immediately
thereafter, to execute the written deed of absolute sale.
Thus, the parties did not merely enter into a contract to
sell where the sellers, after compliance by the buyer with
certain terms and conditions, promised to sell the
property to the latter. What may be perceived from the
respective undertakings of the parties to the contract is
that petitioners had already agreed to sell the house and
lot they inherited from their father, completely willing to
transfer ownership of the subject house and lot to the
buyer if the documents were then in order. It just so
happened, however, that the transfer certificate of title
was then still in the name of their father. It was more
expedient to first effect the change in the certificate of
title so as to bear their names. That is why they
undertook to cause the issuance of a new transfer of the
certificate of title in their names upon receipt of the
down payment in the amount of P50,000.00. As soon as
the new certificate of title is issued in their names,
petitioners were committed to immediately execute the
deed of absolute sale. Only then will the obligation of
the buyer to pay the remainder of the purchase price
arise.
There is no doubt that unlike in a contract to sell which
is most commonly entered into so as to protect the seller
against a buyer who intends to buy the property in
installment by withholding ownership over the property
until the buyer effects full payment therefor, in the
contract entered into in the case at bar, the sellers were
the ones who were unable to enter into a contract of
absolute sale by reason of the fact that the certificate of
title to the property was still in the name of their father.
It was the sellers in this case who, as it were, had the
impediment which prevented, so to speak, the execution
of an contract of absolute sale.
What is clearly established by the plain language of the
subject document is that when the said Receipt of Down
Payment was prepared and signed by petitioners Romulo
A. Coronel, et. al., the parties had agreed to a conditional
contract of sale, consummation of which is subject only
to the successful transfer of the certificate of title from
the name of petitioners father, Constancio P. Coronel, to
their names.
The Court significantly notes that this suspensive
condition was, in fact, fulfilled on February 6, 1985
(Exh. D; Exh. 4). Thus, on said date, the conditional
contract of sale between petitioners and private
respondent Ramona P. Alcaraz became obligatory, the
only act required for the consummation thereof being the
delivery of the property by means of the execution of the
deed of absolute sale in a public instrument, which
petitioners unequivocally committed themselves to do as
evidenced by the Receipt of Down Payment.
Article 1475, in correlation with Article 1181, both of
the Civil Code, plainly applies to the case at bench.
Thus,
Art. 1475. The contract of sale is perfected at the
moment there is a meeting of minds upon the thing
which is the object of the contract and upon the price.
From that moment, the parties may reciprocally demand
performance, subject to the provisions of the law
governing the form of contracts.
Art. 1181. In conditional obligations, the acquisition of
rights, as well as the extinguishment or loss of those
already acquired, shall depend upon the happening of the
event which constitutes the condition.
Since the condition contemplated by the parties which is
the issuance of a certificate of title in petitioners names
was fulfilled on February 6, 1985, the respective
obligations of the parties under the contract of sale
became mutually demandable, that is, petitioners, as
sellers, were obliged to present the transfer certificate of
title already in their names to private respondent
Ramona P. Alcaraz, the buyer, and to immediately
5
execute the deed of absolute sale, while the buyer on her
part, was obliged to forthwith pay the balance of the
purchase price amounting to P1,190,000.00.
It is also significant to note that in the first paragraph in
page 9 of their petition, petitioners conclusively admitted
that:
3. The petitioners-sellers Coronel bound themselves to
effect the transfer in our names from our deceased father
Constancio P. Coronel, the transfer certificate of title
immediately upon receipt of the downpayment above-
stated". The sale was still subject to this suspensive
condition. (Emphasis supplied.)
(Rollo, p. 16)
Petitioners themselves recognized that they entered into
a contract of sale subject to a suspensive condition.
Only, they contend, continuing in the same paragraph,
that:
. . . Had petitioners-sellers not complied with this
condition of first transferring the title to the property
under their names, there could be no perfected contract
of sale. (Emphasis supplied.)
(Ibid.)
not aware that they have set their own trap for
themselves, for Article 1186 of the Civil Code expressly
provides that:
Art. 1186. The condition shall be deemed fulfilled when
the obligor voluntarily prevents its fulfillment.
Besides, it should be stressed and emphasized that what
is more controlling than these mere hypothetical
arguments is the fact that the condition herein referred to
was actually and indisputably fulfilled on February 6,
1985, when a new title was issued in the names of
petitioners as evidenced by TCT No. 327403 (Exh. D;
Exh. 4).
The inevitable conclusion is that on January 19, 1985, as
evidenced by the document denominated as Receipt of
Down Payment (Exh. A; Exh. 1), the parties entered into
a contract of sale subject to the suspensive condition that
the sellers shall effect the issuance of new certificate title
from that of their fathers name to their names and that,
on February 6, 1985, this condition was fulfilled (Exh.
D; Exh. 4).
We, therefore, hold that, in accordance with Article 1187
which pertinently provides -
Art. 1187. The effects of conditional obligation to give,
once the condition has been fulfilled, shall retroact to the
day of the constitution of the obligation . . .
In obligations to do or not to do, the courts shall
determine, in each case, the retroactive effect of the
condition that has been complied with.
the rights and obligations of the parties with respect to
the perfected contract of sale became mutually due and
demandable as of the time of fulfillment or occurrence of
the suspensive condition on February 6, 1985. As of that
point in time, reciprocal obligations of both seller and
buyer arose.
Petitioners also argue there could been no perfected
contract on January 19, 1985 because they were then not
yet the absolute owners of the inherited property.
We cannot sustain this argument.
Article 774 of the Civil Code defines Succession as a
mode of transferring ownership as follows:
Art. 774. Succession is a mode of acquisition by virtue
of which the property, rights and obligations to the
extent and value of the inheritance of a person are
transmitted through his death to another or others by his
will or by operation of law.
Petitioners-sellers in the case at bar being the sons and
daughters of the decedent Constancio P. Coronel are
compulsory heirs who were called to succession by
operation of law. Thus, at the point their father drew his
last breath, petitioners stepped into his shoes insofar as
the subject property is concerned, such that any rights or
obligations pertaining thereto became binding and
enforceable upon them. It is expressly provided that
rights to the succession are transmitted from the moment
of death of the decedent (Article 777, Civil Code;
Cuison vs. Villanueva, 90 Phil. 850 [1952]).
Be it also noted that petitioners claim that succession
may not be declared unless the creditors have been paid
is rendered moot by the fact that they were able to effect
the transfer of the title to the property from the decedents
name to their names on February 6, 1985.
Aside from this, petitioners are precluded from raising
their supposed lack of capacity to enter into an
agreement at that time and they cannot be allowed to
now take a posture contrary to that which they took
when they entered into the agreement with private
respondent Ramona P. Alcaraz. The Civil Code
expressly states that:
6
Art. 1431. Through estoppel an admission or
representation is rendered conclusive upon the person
making it, and cannot be denied or disproved as against
the person relying thereon.
Having represented themselves as the true owners of the
subject property at the time of sale, petitioners cannot
claim now that they were not yet the absolute owners
thereof at that time.
Petitioners also contend that although there was in fact a
perfected contract of sale between them and Ramona P.
Alcaraz, the latter breach her reciprocal obligation when
she rendered impossible the consummation thereof by
going to the United States of America, without leaving
her address, telephone number, and Special Power of
Attorney (Paragraphs 14 and 15, Answer with
Compulsory Counterclaim to the Amended Complaint,
p. 2; Rollo, p. 43), for which reason, so petitioners
conclude, they were correct in unilaterally rescinding the
contract of sale.
We do not agree with petitioners that there was a valid
rescission of the contract of sale in the instant case. We
note that these supposed grounds for petitioners
rescission, are mere allegations found only in their
responsive pleadings, which by express provision of the
rules, are deemed controverted even if no reply is filed
by the plaintiffs (Sec. 11, Rule 6, Revised Rules of
Court). The records are absolutely bereft of any
supporting evidence to substantiate petitioners
allegations. We have stressed time and again that
allegations must be proven by sufficient evidence (Ng
Cho Cio vs. Ng Diong, 110 Phil. 882 [1961]; Recaro vs.
Embisan, 2 SCRA 598 [1961]). Mere allegation is not an
evidence (Lagasca vs. De Vera, 79 Phil. 376 [1947]).
Even assuming arguendo that Ramona P. Alcaraz was in
the United States of America on February 6, 1985, we
cannot justify petitioners-sellers act of unilaterally and
extrajudicially rescinding the contract of sale, there
being no express stipulation authorizing the sellers to
extrajudicially rescind the contract of sale. (cf. Dignos
vs. CA, 158 SCRA 375 [1988]; Taguba vs. Vda. De
Leon, 132 SCRA 722 [1984])
Moreover, petitioners are estopped from raising the
alleged absence of Ramona P. Alcaraz because although
the evidence on record shows that the sale was in the
name of Ramona P. Alcaraz as the buyer, the sellers had
been dealing with Concepcion D. Alcaraz, Ramonas
mother, who had acted for and in behalf of her daughter,
if not also in her own behalf. Indeed, the down payment
was made by Concepcion D. Alcaraz with her own
personal Check (Exh. B; Exh. 2) for and in behalf of
Ramona P. Alcaraz. There is no evidence showing that
petitioners ever questioned Concepcions authority to
represent Ramona P. Alcaraz when they accepted her
personal check. Neither did they raise any objection as
regards payment being effected by a third person.
Accordingly, as far as petitioners are concerned, the
physical absence of Ramona P. Alcaraz is not a ground
to rescind the contract of sale.
Corollarily, Ramona P. Alcaraz cannot even be deemed
to be in default, insofar as her obligation to pay the full
purchase price is concerned. Petitioners who are
precluded from setting up the defense of the physical
absence of Ramona P. Alcaraz as above-explained
offered no proof whatsoever to show that they actually
presented the new transfer certificate of title in their
names and signified their willingness and readiness to
execute the deed of absolute sale in accordance with
their agreement. Ramonas corresponding obligation to
pay the balance of the purchase price in the amount of
P1,190,000.00 (as buyer) never became due and
demandable and, therefore, she cannot be deemed to
have been in default.
Article 1169 of the Civil Code defines when a party in a
contract involving reciprocal obligations may be
considered in default, to wit:
Art. 1169. Those obliged to deliver or to do something,
incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of
their obligation.
xxx
In reciprocal obligations, neither party incurs in delay if
the other does not comply or is not ready to comply in a
proper manner with what is incumbent upon him. From
the moment one of the parties fulfill his obligation, delay
by the other begins. (Emphasis supplied.)
There is thus neither factual nor legal basis to rescind the
contract of sale between petitioners and respondents.
With the foregoing conclusions, the sale to the other
petitioner, Catalina B. Mabanag, gave rise to a case of
double sale where Article 1544 of the Civil Code will
apply, to wit:
Art. 1544. If the same thing should have been sold to
different vendees, the ownership shall be transferred to
the person who may have first taken possession thereof
in good faith, if it should be movable property.
Should it be immovable property, the ownership shall
belong to the person acquiring it who in good faith first
recorded it in the Registry of Property.
7

Should there be no inscription, the ownership shall
pertain to the person who in good faith was first in the
possession; and, in the absence thereof to the person who
presents the oldest title, provided there is good faith.
The record of the case shows that the Deed of Absolute
Sale dated April 25, 1985 as proof of the second contract
of sale was registered with the Registry of Deeds of
Quezon City giving rise to the issuance of a new
certificate of title in the name of Catalina B. Mabanag on
June 5, 1985. Thus, the second paragraph of Article
1544 shall apply.
The above-cited provision on double sale presumes title
or ownership to pass to the buyer, the exceptions being:
(a) when the second buyer, in good faith, registers the
sale ahead of the first buyer, and (b) should there be no
inscription by either of the two buyers, when the second
buyer, in good faith, acquires possession of the property
ahead of the first buyer. Unless, the second buyer
satisfies these requirements, title or ownership will not
transfer to him to the prejudice of the first buyer.
In his commentaries on the Civil Code, an accepted
authority on the subject, now a distinguished member of
the Court, Justice Jose C. Vitug, explains:
The governing principle is prius tempore, potior jure
(first in time, stronger in right). Knowledge by the first
buyer of the second sale cannot defeat the first buyers
rights except when the second buyer first registers in
good faith the second sale (Olivares vs. Gonzales, 159
SCRA 33). Conversely, knowledge gained by the second
buyer of the first sale defeats his rights even if he is first
to register, since knowledge taints his registration with
bad faith (see also Astorga vs. Court of Appeals, G.R.
No. 58530, 26 December 1984). In Cruz vs. Cabana
(G.R. No. 56232, 22 June 1984, 129 SCRA 656), it was
held that it is essential, to merit the protection of Art.
1544, second paragraph, that the second realty buyer
must act in good faith in registering his deed of sale
(citing Carbonell vs. Court of Appeals, 69 SCRA 99,
Crisostomo vs. CA, G.R. No. 95843, 02 September
1992).
(J. Vitug, Compendium of Civil Law and Jurisprudence,
1993 Edition, p. 604).
Petitioners point out that the notice of lis pendens in the
case at bar was annotated on the title of the subject
property only on February 22, 1985, whereas, the second
sale between petitioners Coronels and petitioner
Mabanag was supposedly perfected prior thereto or on
February 18, 1985. The idea conveyed is that at the time
petitioner Mabanag, the second buyer, bought the
property under a clean title, she was unaware of any
adverse claim or previous sale, for which reason she is a
buyer in good faith.
We are not persuaded by such argument.
In a case of double sale, what finds relevance and
materiality is not whether or not the second buyer in
good faith but whether or not said second buyer registers
such second sale in good faith, that is, without
knowledge of any defect in the title of the property sold.
As clearly borne out by the evidence in this case,
petitioner Mabanag could not have in good faith,
registered the sale entered into on February 18, 1985
because as early as February 22, 1985, a notice of lis
pendens had been annotated on the transfer certificate of
title in the names of petitioners, whereas petitioner
Mabanag registered the said sale sometime in April,
1985. At the time of registration, therefore, petitioner
Mabanag knew that the same property had already been
previously sold to private respondents, or, at least, she
was charged with knowledge that a previous buyer is
claiming title to the same property. Petitioner Mabanag
cannot close her eyes to the defect in petitioners title to
the property at the time of the registration of the
property.
This Court had occasions to rule that:
If a vendee in a double sale registers the sale after he has
acquired knowledge that there was a previous sale of the
same property to a third party or that another person
claims said property in a previous sale, the registration
will constitute a registration in bad faith and will not
confer upon him any right. (Salvoro vs. Tanega, 87
SCRA 349 [1978]; citing Palarca vs. Director of Land,
43 Phil. 146; Cagaoan vs. Cagaoan, 43 Phil. 554;
Fernandez vs. Mercader, 43 Phil. 581.)
Thus, the sale of the subject parcel of land between
petitioners and Ramona P. Alcaraz, perfected on
February 6, 1985, prior to that between petitioners and
Catalina B. Mabanag on February 18, 1985, was
correctly upheld by both the courts below.
Although there may be ample indications that there was
in fact an agency between Ramona as principal and
Concepcion, her mother, as agent insofar as the subject
contract of sale is concerned, the issue of whether or not
Concepcion was also acting in her own behalf as a co-
buyer is not squarely raised in the instant petition, nor in
such assumption disputed between mother and daughter.
Thus, We will not touch this issue and no longer disturb
the lower courts ruling on this point.
8
WHEREFORE, premises considered, the instant petition
is hereby DISMISSED and the appealed judgment
AFFIRMED.

SO ORDERED.